You can.. Only the landing page URL should match the display url. For example, if the landing page URL is of the product is abcd.com/product.html, the Display URL should be abcd.com You can, however use your own custom link (the one that provided by the affiliate networks like ClickBank, Commission Junction etc.) in Destination URL.
Direct linking can be tough to get approved on Adwords. I find it best to use a landing page that contains your affiliate link.
Using affliate links using adword is not wise enough. Use Ur own landing pages with targeted design .
adword google allow affiliate links, as long as the landing page match with the display URL. But beware, make sure that the content of landing page must not violate the TOS,
Agree with this entirely. You can easily create your own website with the various platforms that are out there at the moment, such as Wordpress. Buy a domain name, self host it and start driving traffic to your site and then have your affiliate links from there. Can be a nightmare for links to be approved and if you have long affiliate URLs they will not fit in adwords anyway.
Much better to try to avoid doing that. The best approach is to use your own customized landing page which gives Google what it wants in terms of content and relevance to the ad you're trying to place. This will help you with placement as well. It's a little more work, but it will pay off in the long-term!